Washington is giving me a headache, anyone else? Here are my thoughts on the matter. It is a free country, disagree as you see fit (and lefties, you can go ahead and say what you want, I have heard it all before).

1) Cut the entitlements & spending.

2) Don’t raise our taxes, if you cut the extra crap we don’t need to have our taxes raised. I am tired of the tax the rich rhetoric being spewed by the left. I may not be rich, but it is very un-capitalistic to penalize people for being successful. Also, if you increase corporate taxes how do you expect jobs to be created? Savings in taxes will help.

3) Don’t default on the debt, if this happens our country is doomed to the fate of Greece. If you think this won’t have an effect on you personally, YOU ARE DEAD WRONG! If the country is downgraded to an AA rating it will hurt us as individuals. It will be harder than it already is to get a job, interest rates will go up and this country will go down in flames. It may seem pessimistic, but it is the truth and sometimes the truth hurts!

I have 2 very little reasons to think this way. Their future is the most important thing to me. They need to have one. With the way the left is spending they won’t and that is unacceptable. It is time to stand up to Washington and tell them what we want and what America needs. I am not ready to see this country crash and burn and I hope you aren’t either.

I am leaving you with the latest video from Steven Crowder. It is very to the point. No more bailouts, government does not belong in capitalism. Let failing business fail so other business can thrive, the circle of life.

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I came to your blog via twitter. I enjoyed reading some of your articles. I have a couple of genuine questions for you based on this last post and perhaps you could humor me with an answer or two.

Before I ask, I should say that, like you, I have a conservative voting tendency, but that I am concerned by the current ideology of the Republican party which seems to be extremely anti-compromise. For that reason, I have sympathy with the ‘other side’ and think it would be good if some balance was restored. I think the current recall elections are an atrocious waste of money, but I actually hope that some of the Democrats are successful, because if the intransigence by republicans continues, it is a real concern that there may be a future swing in the opposite direction that could be extremely damaging. The recalls will certainly indicate the true feelings of the electorate and that should be informative to our ‘representatives’.

Anyway, here are my questions.

1. You say we should cut entitlements and spending. In Wisconsin, spending has been reduced (certainly), but it has by no means been cut. Instead, much of it has been ‘transferred’ to programs deemed acceptable to the Governor – such as road building, arguably unnecessary legislation like voter ID, tax incentives for ‘successful people’ etc.
But why would a tax incentive to someone earning over $250,000 a year not be considered an entitlement? It is, after all, a drain on government resources. Also, why would anyone consider scrapping programs (such as healthcare for women, and environmental programs) when they clearly save absolute fortunes in the long-term?

2. You say that we should not raise taxes and here, I almost agree wholeheartedly. I spent a lot of effort trying to have my property tax reduced, because my house was (in my opinion) overvalued by the assessor. However, once again, I think the devil is in the detail. In spite of reports to the contrary, the latest budget in WI raises taxes by just over $70 million and takes around $100 million in additional fees. Unfortunately, this increase is not on ‘successful’ people. It is on the poorest in society (through income and homestead tax credits) – oh, and students!
So if it is alright to adjust these tax credits (on ‘unsuccesful’ people) why is it unacceptable to adjust tax credits on ‘successful’ people. On this ‘successful people’ point, I confess to being somewhat bitter. I trained for 14 years (post high school) and have a Master’s degree and a PhD in biomedical science. By scientific standards, anyway, I am an ‘achiever’! Every day, I work extremely hard, hoping to find a cure for cardiovascular disease, but I earn approximately one-quarter of the salary of those people who are being described as ‘successful’. So, why is ‘success’ determined by income and not by ‘contribution’ for example? Why am I deemed ‘unsuccessful’? Why do I pay 30% tax when someone who, for example, sells scrap metal, pays just 16%? And, as for the idea that lowering taxes on such people will help to create jobs, I know it is a ‘lefty’ talking point, but is there any real evidence that such tax breaks actually work? Why, for example, would a company employ somebody else just because their tax burden is decreased, if there is no additional demand for their product and when companies everywhere are trying to increase efficiency? An additional employee would have nothing to do and would simply eat into company profit. Companies like GE seem to prove that such incentives DON’T work as they only create jobs where labor is cheaper and demand is higher (which is why they are moving from WI to China, where, somewhat ironically, a burgeoning socialized medicine scheme is anticipated to create huge demand).

3. Of course, the default question is now moot, but isn’t it interesting that a downgrade by Standard & Poors specifically comes with a report by them that if the Bush Tax cuts are allowed to expire at the end of 2012, it is likely that the USA will earn back its AAA rating? Even a Wall Street group appears to accept that reducing the deficit should be achieved from both a spending AND revenue approach. Surely, then, there can be a compromise (more centrist) position?

4. Finally, the video is really cool (I hadn’t seen this guy before and I really liked his approach and energy), but it seems to be selective in its attack on just bail-outs. I agree, generally, that failing companies should be allowed to fail (though I may have been proved wrong with what is now happening with companies like Chrysler and GM, who are now turning huge profits again). However, surely, if a company can’t survive without Government interference of ANY sort, then it should be ‘allowed to fail’ – period. As you say, “government does not belong in capitalism”. So, why should an otherwise unprofitable business be assisted by the government (tax incentives). After all, there are no tax breaks for you and me should we find ourselves unable to pay our bills. And if I want to hire a technician to help me in my work (i.e., create jobs), I will have to find his/her salary WITHOUT any tax breaks. Don’t get me wrong, I think if a company is genuinely giving something back to the community (such as depleting the unemployment figures), then it should be rewarded. But this should be done AFTER the fact in much the same way that I get my mortgage relief AFTER I have paid my mortgage for a year and fill out my tax return so that the IRS can see that I actually paid something out. Providing tax breaks (to that scrap metal merchant I alluded to beforehand, for example), even when a company or individual may have absolutely no intention whatsoever of employing someone else, is surely not wise. Sure, such a company or individual MIGHT be a job creator, but then again, he might not. Why is such a tax break automatic and not dependent upon the actual creation of a job?

So, lots of questions! Hopefully, it will spur some thought and discussion.

I can respond easily here. “Compromise” is always in the direction of bigger government, more spending and greater debt. It is never the other way around. It must stop somewhere and this is as good a place as any.

I see no reason everyone should not have “skin in the game” through taxes. How much? We can discuss that. The middle class is not being destroyed by Walker’s policies here in Wisconsin (contrary to reports), but rather was under severe attack from Progressive tax-and-spend politics. Note that I said “Progressive”, not “Republican” or “Democrat”.

The S&P report seems to be very clear to me that “it’s the spending, stupid”.

Grumble: I am happy you are a job creator; there are far too few these days. Keep clearly in mind what I said about “compromise”. It is killing your business.

Thanks for your response. I was hoping that a good discussion might be started.

To take your points in no particular order, the S & P report can be spun any way you want it to and this is proved by the equally spurious claims made by BOTH sides. However, S & P states quite categorically (Page 4 in the full report – http://bit.ly/pfrs1x) that it takes no side on the spending versus revenue debate. Latest reports from the managers of S & P state that the rating was based on Washington’s political paralysis to deal with long-term debt and a prolonged procrastination in averting a crisis last week. For example, in interview, John Chambers of S & P said “We think the debacle about raising the debt ceiling is one illustration of that.” Other S & P executives express concerns that this new ‘blame game’ will only push a future ‘re-upgrade’ back further. So, to me, what is painfully clear from the original report is that it is the inability of both sides to reach an agreement that is most troubling to the agency and this is confirmed by their latest comments. To put it into your precise terms – “its the spending, the revenue and the ideological intransigence, stupid”!

All that being said, mark my words that although this Wall Street maneuver will be bad for America, some folks are going to get very wealthy on the back of this. I know it won’t be me or anyone I know!

As for “compromise always being in the direction of bigger government” – what nonsense. Trillions of dollars in cuts are being discussed (rightly so) and, up to now, no revenue increases. How does this equate to ‘bigger government’?

I am glad that you agree with the idea of taxation being on the table. I am thrilled to notice that just this weekend, even Paul Ryan has finally changed his tune on this matter. Only a month ago he was insisting on a “revenue neutral” approach. Now he says he would approve a mix of revenue raises and spending cuts. It seems a shame that it has taken a disaster like a credit rating reduction (albeit inevitable under the current political climate) to drive such concessions.

Finally, unfortunately, I am not currently a job creator. You misunderstood my comments. I would like to be a job creator, but at this stage I cannot afford it – nor do I need a technician at this stage (which demonstrates why a tax break would be utterly useless in this context and would simply increase my net income). However, you are correct that my ‘business’ is being killed. I am a scientist and my ‘business’ has been sorely underfunded for years (by both sides of the political divide). Creating jobs in education and research is clearly not on the agenda for Republicans because, apparently, we cannot afford it. This attitude is, sadly, extremely short sighted, as public health programs save billions of dollars (and lives) in the long-term.

No, it is nonsense that I am wrong on this. Cuts have been “discussed” but in no way has any indication been given that government has any intention of actually cutting. “Revenue increases” (GAWD what a bull$hit term – call it what it is) are immediate and cuts are over ten years. Do you really believe that any future Congress will consider itself encumbered by this? At what other point in the last 50 years have REAL cuts in the federal government been enacted? I can save you the Google time….none.

Public health programs do not save money. Zip, zero, zilch, nada. Every government run health program costs far more than envisioned and is only “cost effective” because they stiff the provider, paying cents on the dollar in reimbursement. Guess who picks up the tab. Oh, the rest of us. And any thought that government run healthcare is a good idea only has to butt heads with the reality of every other country that has tried it. Healthcare becomes a rationed commodity. Any claim that is some kind of Human Right is ludicrous. It is taking the talent (property) of another without due process or remuneration. Would you be willing to take 50 cents on the dollar for your labor just because the government thinks you should?

You are a scientist who gets his bread from the taxpayer, eh? In what manner should the government be the “creator of jobs”? any? Not just education and research. We just shoved trillions of dollars into the economy, bailed out all the bad actors, from underwater homeowners to Wall Street Friends of Obama (heretofore referred to as FOOs) and got a big fat zero out of it. Put money in the hands of consumers and you will get the economy ticking again. Unfortunately the government, in their Keyesian foolishness (it has also never worked – just like Socialism) have spent us into a corner. Creating jobs in education? We should just throw a bunch more teachers out there? What…so they can sit in empty classrooms? This may come as a surprise, but the school age population is falling relative to the population. Schools are closing because there are not enough children to attend them.

Any compromise right now would be a disaster. Increasing taxes in a minimal recovery may enrich you, but it will impoverish nearly all of us who work in the private sector. It will dry up demand and with that demand, jobs.

I am not sure if you made your reply above to insult me (getting my bread from the taxpayer? – actually, no, I get a portion of my salary from student fees, a portion from donations to the University and a portion from the National Institutes of Health, which is a Government agency, but the Government gets less than half of its income from tax revenues and a lot from the licensing of products and treatments scientists like me discover when working for the big bad Government), or whether you genuinely misunderstood what I meant by public health programs.

I will not attempt to answer your questions about cuts versus revenues, other than to say that I was quite sure there are currently no new revenues proposed (though some tax cuts are likely to expire a year hence), so how they can be ‘immediate’ is beyond me. And $900 billion may not satisfy you, but as an initial figure, it is at least ‘a beginning’.

But your assertion regarding public health is staggering (“Zip, zero, zilch, nada”) and insulting – as this is my area. I will give you a few examples of public health programs that have saved enormous sums of money and leave it at that.

1. Vaccines.
a. One scientific case study (Cost-Effectiveness of Vaccination versus Treatment of Influenza in Healthy Adolescents and Adults – by PA. Muennig and K. Khan, in the scientific journal Clinical Infectious Diseases) estimated that life-long vaccination against influenza (16 – 65 years) would save over $27,000 per person affected in comparison to treatment, hospitalization and time off work. Thus, if a just one million people are vaccinated throughout life, there are potential savings of $27 trillion over 5 decades. I leave you to extrapolate for more realistic percentages of the population.

b. According to the CDC, in addition to saving lives and improving the quality of life, every dollar spent on childhood vaccines saves $6.30 in direct medical costs, with aggregate savings of $10.5 billion per year (USA). When including indirect costs to society (missed work, death and disability as well as direct medical costs) the figure increases to $18.40 for every dollar spent, producing societal aggregate savings of $42 billion per year. The DTaP vaccine is particularly cost effective and, more importantly, diphtheria immunizations alone prevent almost 13,000 deaths per year (not dollar savings admittedly, but important ‘savings’ nonetheless).

2. Cancer research. I leave you to ponder the economic savings that will be afforded if a cure for all cancers is discovered and implemented by public health providers. In the mean-time, early screening (particularly for women) saves billions of dollars a year. Figures from a single case study from the journal Breast Cancer Research & Treatment by L Kauhava and coworkers showed treatment costs were 2.8-fold greater in those dying of breast cancer compared to survivors.

Now, of course, we could just adopt a health-care policy of a country such as Somalia and tell those breast cancer patients (and kids with measles) to go die in a gutter (that would be extremely cheap – I’m sure) but I am not certain that is the way to go for a civilized ‘first-world’ country like the USA. In the mean-time, our health-care costs run around $250 billion a year (which, at 16% of GDP, is higher than most, if not all, of those silly countries with socialized medicine) and I think we could probably do better.

Also, admittedly, spending a few hundred dollars on screening a woman against breast cancer does seem expensive, and doing away with such expensive ‘preventative’ measures would save an enormous amount of money in the short term, but the cost for a generation hence would be huge (not to mention the societal cost of having thousands of mothers die unnecessarily).

The idea that healthcare is a ‘rationed commodity’ only in countries with socialized medicine ignores the fact that huge numbers of people in the USA have no healthcare insurance whatsoever and, as a result, some 45,000 Americans die ever year (a 2009 Harvard study). If that isn’t rationing, I’d like to know what is. And I can tell you from experience, having lived in Spain and Britain, that there is nothing exceptional about healthcare in the USA other than its cost.

And why should programs such as my own be sponsored by Government (not paid for in their entirety, for reasons given above) and therefore be part of a ‘job creation’ scheme. Well, because the sorts of basic science research undertaken by Universities all around the country would be far too unprofitable for corporations to bother with. We provide the background that will ultimately lead to a potential cure and it is only THEN, that the free market comes into play. If you want the USA to continue to be in the forefront of medical research (a position it has arguably already lost), you had better hope that groups like the NIH continue to be funded. Otherwise, as with so many aspects of American ‘job creation’ you’ll find the opportunities being outsourced to countries like India and China.

So if the rest of your information is based on opinions with as much merit as those you have about healthcare, I suggest you ask yourself if you just might be a tad ‘off’.

Compromise is a last resort, always has been, always will be. When Democrats don’t offer ideas or move their goals when it looks like the other side will accept, there can be no discussion, much less compromise. Ade, you are not a Conservative. You’re a lefty troll, probably a paid activist. I wish your search for knowledge was genuine.
Love,
The Hearland